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The Flying L Trader – February the 3rd

The biggest news from Friday and the weekend was the NZ Central bank governor Wheeler coming out to say the currency was hurting business which say the kiwi dollar tank and break out of the range, friggin finally! Also out was the Chinese manufacturing PMI which was steady and above the 50 mark which shows growth. Other interesting notes is that VIX continued to climb as stocks got spanked again, oil bucketed down too and copper also off a decent clip. Copper started the year at 3.4 and closed Friday at 3.19 not far from 2013 lows of 3.13.

So this week should see the continuation of the fall out of the Fed’s tapering on emerging markets, the US dollar had a stella night on Friday as greenbacks flew back to Uncle Ben. We also have central banks from Australia, Europe and England all coming out with their monthly monetary policy statements and stance on interest rates and to finish the week there is the US Non-Farm Payrolls. Do not expect any of the central banks to move on rates, Australia is a 5% chance of cut so that ain’t gonna happen. But it is the language of the statements that people will be watching, looking for signs of following the Fed into either reducing their asset purchasing program (re: the BOE) or at least stopping the rhetoric of crying about how tough it is and the need for lower rates.

AUDUSD – An engulfing bar that closed balanced at the mid-point of the range. Cannot tell anything about sentiment from that, however I do expect to see the Aussie test 85 cents in coming weeks, it just isn’t strong enough against the US$ yet and 8835 is coming a stronger resistance level every day now. Resistance: 8890/9167/9300/9428 Support: 8654/8550/8300

EURUSD – Got toasted going into the end of the week. Price action is chopping all over the ema and it is hard to gain a consistent direction from it. Leave it alone. Resistance: 13733/13830/14065 Support: 13488/13420/13266

GBPUSD – Also got pushed lower but there is far more support for the cable than most others. Will be interesting to see if 1.63 holds it and price turns bullish again. Resistance: 16610/16785/1.69 Support: 16300/15950/15830

NZDUSD – The RBNZ said and did nothing then Friday Wheeler spoke and the kiwi ghosted through the support level. Sell any rallies as this is going where it should be valued at, closer to 75 than 80. Resistance: 8475/8535/8607 Support: 8090/7925/7714

USDCAD – An engulfing seller bar and also an indication that this run may be over with momentum dipping too. A LHLL today should bring more selling in during the week but do not be surprised if there is just sideways action. Resistance: 11170/11233 Support: 11035/10859/10715

USDJPY – Sideways action, like the ¥ is producing. A bearish engulfing bar to finish the week that is true but It is still holding above support and once buyers come back in I will be looking for opportunities to join them. Resistance: 105.57/108.35/110.50 Support: 101.65/100.00

GOLD – Just meandering around between support and resistance with little idea where it wants to go with all the funds flowing around it, in and out of stocks and bonds. Resistance: 1265/1,307/1,350 Support: 1,225/1,180/1,040

BITCOIN (from Mt.Gox exchange) – Also been in a tight range, 911 to 969 for last 4 days. Expect a drop soon, perhaps on NFP.